For a lot of people, debit cards are a lot safer to use than credit cards, as the risk for watching debt climb higher and higher is eliminated. However, there are several different pitfalls that can occur with debit cards that can cause a large amount of financial distress. Below you’ll find 5 pitfalls that you will want to watch for when debit cards are frequently used.
- Steer clear of the overdraft fee trap – There are numerous people who have ended up paying tons of money in overdraft fees from purchases made on debit cards. A majority of the time it is consumers that already struggle to stay afloat. When overdraft fees are charged to a banking account, it can quickly end up in a vicious cycle that is hard to get out of.
- Keep the calendar in sight – To avoid problems that small transactions made on a debit card can create, it is much better to pay close attention to dates for paycheck deposits. While a few bucks here and a few bucks there may not seem like much, it can quickly turn into over $100 when you consider all the fees for these transactions are tacked onto the account. If you’re running tight towards the end of the month, consider calling utility companies to set the due date off a week or so.
- Be mindful of holds – Many people are unaware that companies like gas stations, rental car companies and hotels tend to put holds on debit cards that are used for an amount that is larger than the actual transaction. This can turn into a frustrating situation in a hurry when you are limited on funds to begin with.
- Always pay attention to activity on your account – It can be difficult to know about all the activity that is occurring with a bank account when there are numerous transactions being made and especially when it is a joint account. In order to make certain fraud charges on an account will be noticed immediately, it is essential that partners of joint accounts stay in constant communication. This is due to the fact that there is often a specific time frame that fraud charges can be reported and covered by your bank.
- Use cash instead of debit cards whenever possible – There are many people who find it to be way too easy to throw their debit card onto a merchant’s counter when they’ve made a purchase. When debit cards are used frequently, it can be a habit that takes a little time to break. In many situations when these cards are used on a regular basis, families find their checking account to have a zero balance before the month is even up. Although each purchase they make may be just a couple bucks, when numerous transactions are added together it ends up being a lot more money than they intended on spending throughout the month. It is much safer to treat debit cards as if they are the same as credit cards and use cash for items needed during the month.